Paper trading is kind of simulation of buying and selling of stocks. Transaction process does not involve actual money. The profit or loss made in such process does not affect the trader. This type of trading is often used for two purposes.
- New traders use this for practice and to get familiar with the trading world.
- Senior traders use the process to verify a new strategy.
Active Portfolio Service (APS) supports paper trade. One can practice and verify the 3 in 1 strategy adopted by APS without involving actual money. APS recommends a particular set of stocks to buy or sell periodically along with quantity (depends upon user's initial budget). The system expects users to enter their transaction with price at which they bought or sold the stocks. As system has no link to their actual trading account so it just trusts the entry made by users. For paper trading mode users can see the price at NSE or BSE website and they can enter the same price as transaction price. APS does all accounting work and shows users their profit and loss on daily basis.
Transaction Entry in APS
For risk avenger investors we recommend to practice paper trade before they gain confidence to enter the actual market. Our three months service is best suited for the this purpose. Most of the times we have seen one month practice imparts enough confidence to enter the actual market.
You may be interested in our other article Paper Trade with APS.
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